Following the return of Donald Trump to the White House, key US and Japanese financial institutions have exited the Net-Zero Banking Alliance, citing legal risks and antitrust fears. This move raises questions about the future of global climate finance and decarbonization efforts.
Major financial institutions in the United States and Japan have begun withdrawing from an international framework aimed at promoting decarbonization, signalling potential shifts in global climate finance strategies. This retreat has been attributed to escalating legal concerns following the return of former US President Donald Trump to the White House in January 2025, known for his opposition to climate action.
The Net-Zero Banking Alliance (NZBA), established in 2021 during the Biden administration, previously counted over 140 financial institutions pledging to align their lending and investment practices with decarbonization goals, aiming for net-zero greenhouse gas emissions by 2050. However, since the confirmation of Trump’s return to office in November 2024, several major US banks, including Goldman Sachs and Citigroup, have swiftly withdrawn from the alliance. This action appears to be driven by perceived shifts in the political environment and increased legal risks associated with participation.
Following the US developments, Japanese financial institutions have also begun to retreat from the NZBA. In March 2025, Sumitomo Mitsui Financial Group (SMFG) spearheaded the exits, with Mitsubishi UFJ Financial Group (MUFG), Mizuho Financial Group, and others subsequently following suit. Notably, among Japan’s leading banks, only Sumitomo Mitsui Trust Group remains part of the alliance.
A significant underlying concern prompting these withdrawals is the potential violation of antitrust laws. There are fears that coordinated efforts to reduce lending to fossil fuel companies could be legally interpreted as antitrust activity. In the US Congress, predominantly among Republican members, the NZBA has been labelled a “climate cartel.” Given the new administration’s willingness to challenge private enterprise norms, including through reciprocal tariffs, remaining within the NZBA framework is increasingly viewed as a legal liability.
Despite these institutional exits, many banks continue to assert their commitment to decarbonization efforts. However, a source from a major megabank highlighted a discrepancy between public statements and actual actions, saying, “Didn’t they join because they believed in it? Now it just looks like they’re leaving because everyone else is.”
The financial backing provided by these institutions has been critical in reinforcing the value of decarbonization, often legitimising higher costs associated with environmentally friendly products. The recent wave of departures from the NZBA could signal a sharp change in the climate finance discourse and potentially slow progress in related initiatives.
These developments come amid broader concerns that the Trump administration is disrupting established international cooperation frameworks, particularly in climate and trade sectors. The implications for global decarbonization efforts remain to be fully seen.
Source: Noah Wire Services
- https://www.gtreview.com/news/americas/six-big-us-banks-pull-out-of-net-zero-banking-alliance/ – Supports the claim that major US banks, including Goldman Sachs and Citigroup, have withdrawn from the Net-Zero Banking Alliance following the return of Donald Trump in early 2025.
- https://www.unepfi.org/net-zero-banking/members/ – Corroborates the statement that Japanese banks such as Mizuho Financial Group have withdrawn from the Net-Zero Banking Alliance in 2025, with only Sumitomo Mitsui Trust Group remaining.
- https://www.clearbluemarkets.com/knowledge-base/financial-institutions-withdrawing-from-net-zero-alliances – Supports the information about multiple financial institutions withdrawing from the NZBA due to legal and political concerns, including the mention of antitrust fears and a broader ESG backlash.
- https://sustainabilityunlocked.com/discover/insights/Impact-US-Banks-Net-Zero-Banking-Alliance – Details the impact and timing of US banks’ exit from the NZBA and frames it as a preemptive move responding to changes in the political environment with Trump’s administration.
- https://www.business-humanrights.org/en/latest-news/net-zero-banking-alliance-drops-15-target/ – Confirms the NZBA’s strategic shift in 2025 to loosen its climate targets amid member withdrawals, reflecting challenges in maintaining stringent decarbonization commitments.
- https://www.unepfi.org/news/withdrawal-of-triodos-bank-from-net-zero-banking-alliance/ – Supports the broader pattern of withdrawals from the NZBA, illustrating increasing legal and regulatory pressures on banks participating in coordinated climate initiatives.
- https://news.google.com/rss/articles/CBMijgFBVV95cUxNTVBnM2xWcFZPMUFCVVpZb3o5LWxmRjBVeWRicWdlWFBtc1dEMllEXzJVVmFRZ2dzR3FnMGRIUE9kdDVYUzdWVDYxYjdkOWV0QjhSZGttbVpIWjdMUjMzb283STNiUVotSGgwOGR0UkVRanoxV0NLbGFPWGlYV1NFWERfaTBGcm9uMDcyZTZ3?oc=5&hl=en-US&gl=US&ceid=US:en – Please view link – unable to able to access data
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
9
Notes:
The content is recent, referencing events in January and March 2025, and appears to be new rather than recycled news.
Quotes check
Score:
8
Notes:
There is one quote from a source at a major megabank, which could not be verified through online sources. It might be an original comment, though without further context or confirmation, it is difficult to assert as wholly authentic.
Source reliability
Score:
5
Notes:
The narrative originates from a Google News RSS feed, which typically aggregates content from various sources. However, without specific details on the original publication, the reliability is uncertain.
Plausability check
Score:
8
Notes:
The developments described are plausible given the political context and recent changes in the U.S. administration. However, the specific details about legal concerns and withdrawals might require additional verification.
Overall assessment
Verdict (FAIL, OPEN, PASS): OPEN
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The narrative appears relatively fresh and plausible based on recent political shifts, but its source reliability is uncertain. While the quote provided could be original, it lacks verification. Therefore, further investigation is recommended.
